Settlement reached in Calif. bullet train lawsuit

In this April 11 file photo, California Gov. Jerry Brown, center left, and his wife Anne Brown, center, and Dan Richard, chairman of the High Speed Rail Authority, left, prepare to board a high speed rail train leaving from the Beijing South train station in Beijing, China. The California agency overseeing the state's effort to build the nation's first high-speed rail line received a boost April 18 when a judge approved a settlement in a major lawsuit that sought to block the project.

SACRAMENTO, Calif. (AP) — The California agency overseeing the state's effort to build the nation's first high-speed rail line received a boost Thursday when a judge approved a settlement in a major lawsuit that sought to block the project.

However, the rail authority also faced a setback that could delay work and add to the project's soaring costs.

The rail authority reached the settlement with a group of Central Valley farmers who sued to block the bullet train on environmental grounds. The approval by a Sacramento County Superior Court cleared the last legal hurdle for the $68 billion project to break ground this summer.

Getting the environmental lawsuit out of the way is a significant win for Gov. Jerry Brown, a Democrat, and other allies of the ambitious, much-criticized project. Brown said in a news release that it is a "very solid settlement" between farmers and the California High-Speed Rail Authority.

Under the deal, the authority agreed to establish a $5 million fund to preserve farmland and pay nearly $1 million in legal fees to the groups that filed the lawsuit, which include the Madera and Merced county farm bureaus. It also spells out how the authority will work with landowners to acquire land along the route.

Dan Richard, chairman of the rail authority board, said the agreement paves the way for construction to start this summer on the first 30-mile segment of track from Madera to Fresno.

The settlement also "shows that in working together with the agricultural community, we can build high-speed rail and work toward preservation of agriculture in the Central Valley," Richard said.

Also Thursday, the federal Surface Transportation Board ruled that it has authority over the California project, which could mean substantial delays and cost overruns if the state is forced to comply with federal railroad regulations.

The state has applied for an exemption to that oversight, and Richard said he is confident the board will approve its request next month, as it did recently for a Florida project.

Voters approved issuing $10 billion in bonds for the project in 2008, but public support has dwindled in recent years as the project's costs have soared.

Sacramento County Superior Court Judge Timothy Frawley approved the legal settlement a day before a scheduled hearing on the merits of the case.

"We were able to achieve some significant additional protections for agriculture in Madera and Merced counties," Tom Coleman, president of the Madera County Farm Bureau, said in a news release.

The farm groups had previously sought a preliminary injunction that would have halted work while the case was being heard, but the judge denied the request last November. He said it appeared the California High-Speed Rail Authority acted reasonably and in good faith in trying to follow the state environmental laws.

That decision was an early indication that the farmers might not prevail in their lawsuit.

The rail authority had previously reached settlements in some of the other dozens of legal claims against the project. Earlier this year, it won a separate lawsuit filed by the San Francisco Bay area city of Atherton over its environmental review.

It still faces a 2011 lawsuit from Kings County that claims the state's plan violates the terms of the voter-approved bond measure because not all the track would be electrified.

The rail authority has been buying land along the proposed route and performing site surveys, engineering design work and geological testing. Officials this month announced that a bid by a joint venture of just under $1 billion had emerged as the top bidder.

Lawmakers approved the first phase of the planned 800-mile line last summer, allowing the state to begin selling $2.6 billion in bonds for construction and tap $3.2 billion from the federal government.

The money is contingent upon completing the first phase of the project by 2017, requiring what officials say is an unprecedented construction pace.